Are Mixed Neighborhoods Always Unstable? Two-Sided and One-Sided Tipping


A great deal of urban policy depends on the possibility of creating stable, economically and
racially mixed neighborhoods. Many social interaction models- including the seminal
Schelling (1971) model- have the feature that the only stable equilibria are fully segregated.
These models suggest that if home-buyers have preferences over their neighborhoods' racial
composition, a neighborhood with mixed racial composition is inherently unstable, in the
sense that a small change in the composition sets off a dynamic process that converges to
either 0% or 100% minority share. Card, Mas, and Rothstein (2008) outline an alternative
"one-sided" tipping model in which neighborhoods with a minority share below a critical
threshold are potentially stable, but those that exceed the threshold rapidly shift to 100%
minority composition. In this paper we examine the racial dynamics of Census tracts in
major metropolitan areas over the period from 1970 to 2000, focusing on the question of
whether tipping is "two-sided" or "one-sided". The evidence suggests that tipping behavior
is one-sided, and that neighborhoods with minority shares below the tipping point attract
both white and minority residents.

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